“The U.S. economy continues to grow, and strong demand for rail service demonstrates that the freight rail industry is integral to this growth,” the Association of American Railroads (AAR) declared Monday, Feb. 2, 2015, in releasing its 15-page 2015 Freight Rail Industry Outlook outlining the industry's prospects.
“In 2015, the nation's major freight railroads plan to spend an estimated $29 billion—which would set an annual record—to build, maintain, and grow the rail network,” AAR's report stated. “This private spending will go to expenditures like new equipment and locomotives, installation of new track and bridges, the raising of tunnels, and new technology used to keep America's’rail network the best in the world.”
In terms of employment, AAR noted that “freight railroads estimate they will hire 15,000 people this year, building on hiring trends over the past five years. These are high-paying jobs being made available due to projected retirements, normal attrition as well as growth.” New hires, of which an estimated 20% will be veterans, join the ranks of those with compensation, including benefits, among the highest of any industry, averaging $109,700 per year.
“Sound public policy and today’s balanced economic regulations make it possible to offer high-paying rail jobs and provide the affordable and efficient service American businesses need and expect if they are to compete in a global marketplace, said AAR President and CEO Edward R. Hamberger. “The rail industry’s ability to move more of what our economy needs rests on its ability to earn the capital necessary to continue record private investments, while supporting jobs across the country. With the right federal policies in place, the world’s best rail network is on track to be even better.”
AAR asserted that the industry’s role in 2015 will in essence extend the positive impact freight rail investment has had already. “The combined economic impact of freight rail spending—roughly $575 billion over the past few decades—has rippled across the country,” AAR said. “These private investments have helped improve safety, efficiency, and reliability of the nation's 140,000-mile rail network, while supporting more than 180,000 well-paying jobs at railroads nationwide.”
“Unlike most other transportation modes, freight railroads rely on their own funds, not taxpayer dollars, to build and maintain their networks,” said Hamberger. “The result of spending more than half-a-trillion dollars of private funds over the last couple of decades makes this country’s freight rail system the envy of the world.”
At the top of the freight rail industry’s policy concerns “is a push by some rail shipper groups to obtain price caps and force changes to rail operations through new regulations.,” Hamberger pointed out. “Other proposals would vastly expand the role of government in the day-to-day running of railroads and curb railroads’ ability to earn revenue needed to sustain needed infrastructure spending. While seeking increased regulation and government intervention, these rail customers are simultaneously laying the charge that railroads are not investing enough to meet the increased demand for rail service and to improve network efficiency. Shippers cannot have it both ways. The U.S. rail network survives and grows overwhelmingly on private investment—its own. Imposing price caps, rather than letting the marketplace work, will mean that railroads have less revenue to spend on essential infrastructure improvements at exactly the wrong time—when there is an increased demand to move more to power the recovering economy.” Hamberger stressed that “the current economic regulatory structure works, providing multiple avenues for shippers to seek regulatory review of concerns, while giving railroads the opportunity to earn revenue needed to spend and reinvest in the network. The current economic regulatory framework also provides an environment in which rail companies—rather than U.S. taxpayers—foot the bill for the maintenance and upkeep of the coast-to-coast rails that industries rely upon. A healthy freight rail industry is vital to the nation’s economic recovery and growth. Continuing today’s balanced regulation is essential for a robust freight rail network in 2015 and beyond.”
An Executive Summary, and access to an AAR video link on the 2015 Freight Rail Industry Outlook, can be obtained by clicking here.